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Getting ready for credit
Getting ready for credit
On 1 July 2010 ASIC will take over the regulation of consumer credit and finance broking under the National Consumer Credit Protection Act 2009 (National Credit Act).
From 1 April 2010 until 30 June 2010, persons who engage in credit activities will be able to apply to ASIC to be registered. From 1 July 2010, they will be able to apply for an Australian credit licence.
This national credit regime will replace the existing state and territory-based regulatory regime. Products that will be regulated under the national credit regime include home loans, personal loans, credit cards, consumer leases, overdrafts and line of credit accounts, among other products and services.
This information sheet explains how the national credit regime applies and what you can do now to start getting ready.
Who is affected?
Anyone who engages in credit activities will be affected by the national credit regime.
‘Credit activity’ is defined in s6 of the National Credit Act. It includes:
- providing credit by way of a credit contract or consumer lease,
- benefiting from mortgages or guarantees relating to a credit contract or consumer lease, and
- providing credit services in relation to credit contracts and consumer leases.
Note: For an explanation of ‘credit activities’, ‘credit contracts’, ‘consumer leases’ and ‘credit services’, see ASIC's Regulatory Guide 203 Do I need a credit licence?
(RG 203). 
What are the requirements?
If you plan to engage in credit activities from 1 July 2010, you should:
- become registered with ASIC as a ‘registered person’ between 1 April 2010 and 30 June 2010, and
- apply for a credit licence between 1 July 2010 and 31 December 2010, or
- become a representative of a registered person or a credit licensee.
Who is exempt?
You may not need to register or apply for a credit licence if:
- you only engage in credit activities on behalf of someone else who is registered or has a credit licence (for example, because you are an employee or director of the company or one of its related bodies corporate, or you are authorised as a credit representative), or
- your credit activities are not within the scope of the national credit regime, or
- you are covered by an exemption.
What do I have to do, and when?
If you are engaging in credit activities now, you need to register with ASIC and apply for a credit licence. (See the timeline for transition to the national credit regime.)
Registering with ASIC
- Registering with ASIC will allow you to continue to engage in credit activities from 1 July 2010. After you are registered, you can continue to engage in credit activities until you complete the licence application process.
- You can register online with ASIC between 1 April 2010 and 30 June 2010
- When you apply for registration, you will need to show that you can meet certain requirements that will apply to you as a credit licensee.
- If you haven’t registered with ASIC by 30 June 2010, you must stop engaging in credit activities until you have a credit licence.
Register now
Applying for a credit licence
- After you are registered with ASIC, you have six months to apply for a credit licence (from 1 July 2010 until 31 December 2010). You can apply for a credit licence online at www.asic.gov.au/credit.
- As long as you are registered with ASIC and you have lodged an application for a credit licence by 31 December 2010, you can continue to engage in credit activities until we make a decision on your application.
- After you are granted a credit licence, your registration will be cancelled and you will only be able to engage in the credit activities authorised by your licence.
- If you haven’t lodged an application for a credit licence by 31 December 2010, we will cancel your registration and you must stop engaging in credit activities until you have a credit licence.
New starters
- If you plan to engage in credit activities for the first time after 1 July 2010, you will need to be covered by a credit licence (your own or someone else’s) before you start those activities.
- You will generally not need to register with ASIC.
Where should I start?
Step 1: Work out whether your business involves ‘credit activities’
Read Regulatory Guide 203 Do I need a credit licence? (RG 203). This guide will help you decide whether you need to get a credit licence (and therefore register with ASIC).
Step 2: Familiarise yourself with the registration and licensing process
Read Regulatory Guide 202 Credit registration and transition
(RG 202). This guide outlines the process for registering with ASIC and the transition from registration to licensing.
What can I do NOW to make registration easier?
Become a member of an ASIC-approved external dispute resolution (EDR) scheme
When you register with ASIC, you must be a member of an EDR scheme approved by ASIC. These schemes are:
- Financial Ombudsman Service (www.fos.org.au or phone 1300 780 808), or
- Credit Ombudsman Service Ltd (www.creditombudsman.com.au or phone 1800 138 422).
Become a member now to save time later.
Do background checks on your people
In your registration application, you will need to make certain statements about past conduct of directors, company secretaries, partners and trustees involved in your business. Do background checks now so you can be confident about making these statements.
Update your details on other ASIC registers
When you register with ASIC, your details will be pre-filled in the online application form from other registers that ASIC keeps (for example, the company register and financial services licensee register). Your details must be up-to-date so that your application is correct.
If you need to update any details, lodge a Form 484 (for company details) or FS20 (for financial services licensee details) before you start your application.
Where can I get more information?
Click on the picture to see the timeline for transition to the national credit regime
Download pdf version of this page
| This is Information Sheet 96 (INFO 96). Information sheets provide concise guidance on a specific process or compliance issue or an overview of detailed guidance. |
ASIC Website: Printed 07/31/2010
